Use the following assumptions to forecast a balance sheet and income statement for MBA, Inc. and use this information to answer the questions that follow. a. Notes payable decline by $3,000 b. Mktble. Sctys will not change c. Cash and Common stock do not change d. Sales grow by 20% e. The gross profit margin (gross profit divided by sales) decreases to 38% f. Gross fixed assets will grow by $25,000 g. Depreciation expense (on the income statement) grows by $3,000 over Year 0 h. Operating expenses and accruals will grow at the same percentage growth rate as sales i. Accounts receivable will turn over 7.2 times, on average (based on forecasted sales and a 365-day year. Use end of year numbers, not averages.) j. Days inventory will be 81 days in the coming year (based on forecasted COGS and a 365-day year. Use end of year numbers, not averages.) k. Accounts Payable will grow at the same rate as sales l. The firm will pay 65% of forecasted net income out in dividends m. The tax rate remains at 40% n. Interest expense is forecasted to be $5,800 o. The plug figure is LTD (in other words, LTD changes to make the BS balance)

Assets	Year 0	Forecast	Liab. & Equity	Year 0	Forecast
Cash	5,500		Accts. Pay.	14,400
Mkt. Sctys.	6,000		Notes Pay.	51,000
Accts. Rec.	25,000		Accruals	24,000
Inventory	30,000		Curr. Liab.	89,400
Curr. Assets	66,500
Gross FA	284,500		LTD	65,000
Accu. Depn	82,500		Comm Stk.	71,100
Net Fixed	202,000		RE	43,000
Total Assets	268,500		Total L&E	268,500

	Year 0	Forecast
Sales	200,000
COGS	120,000
Gross Profit	80,000
Oper. Exp.	50,000
Depn.	12,000
EBIT	18,000
Interest	6,000
EBT	12,000
Taxes	4,800
Net Income	7,200
Dividends	4,320